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Malibu Media Ordered to Pay Sanctions

Rhett PardonDec 13, 2013 12:30 PM PST

MILWAUKEE — Attorneys for Malibu Media were sanctioned yesterday by a federal judge, who said penalties would act as a deterrence over abusive attempts to coerce porn-piracy defendants into settlements.

Malibu Media produces and distributes content mostly through X-Art.com and has become one of the most prolific companies when it comes to consumer piracy litigation.

Yesterday, U.S. District Judge Rudolph Randa said he followed the lead of two other Wisconsin federal jurists who earlier this year directed Malibu Media to show cause as to why it shouldn't be sanctioned for attaching exhibits that help paint pictures of alleged infringers still identified as John Does.

In the present consolidated case involving three piracy defendants, Malibu Media vigorously defended its decision to attach such exhibits to its complaints, Randa said.

The exhibits included form entries from alleged porn-piracy defendants over questions about authorized household users and the distance from defendant residences to closest neighbors, among others.

Malibu Media explained that it hired a company called IPP International to "expand the universe of .torrent files that are scanned" as part of Malibu Media’s pre-suit investigation.

The results were the exhibits that were used as a cross-reference tool to help identify alleged infringers of its own films and other movies — even some that Malibu Media doesn't hold copyrights to.

But Randa said that even if the exhibits were somehow relevant or useful in this game of “whodunit,” there would be no legitimate justification for Malibu Media to attach the exhibit to its complaints.

"This is simply an additional form of coercion," Randa said. "The subscriber might attempt to shift blame to someone else, but the subscriber would still feel substantial pressure to accept the blame, especially if the actual infringer is a family member or other close relation.

"Either way, the choice between outing yourself or one of your relatives as an alleged connoisseur of extreme pornography isn’t a very appealing scenario."

Randa yesterday ordered Malibu Media attorneys to pay up $600 in sanctions to the court as "a measure of deterrence" for improper conduct.

Records obtained by XBIZ show the studio has waged 1,548 copyright infringement lawsuits in the past two years. Its earliest cases last year typically listed swarms of defendants, but because of numerous dismissals by jurists the cases now are mostly targeting solo defendants.

"Obviously, the use of [the exhibits] is, or was, part of an overall pattern of abusive litigation practices," Randa said. "Malibu Media is a sophisticated litigant, so it should not be allowed to avoid sanctions simply by adapting its tactics after being questioned by multiple federal judges.

"Malibu Media and its counsel should not be allowed to abuse the legal system in this manner without being called to account for it."

Randa yesterday also granted the technology-rights group Electronic Frontier Foundation's friend-of-the-court brief in support of sanctions in the case.

Kurt Opsahl, a staff attorney at EFF, told XBIZ that the group is pleases that Randa accepted its amicus brief and agreed that Malibu Media abused the legal system.

"The salacious but irrelevant titles on Malibu’s [exhibit list] served no legitimate purpose in a complaint," Ophahl said. "Their only purpose is to coerce defendants to settle, based not on the merits of the case but on the reputational harm of being publicly associated with hardcore pornography — a purpose of harassment and embarrassment forbidden by the federal court's rules. While copyright owners have a right to enforce their copyrights, they must follow the same rules and observe the same standards of conduct as all other federal litigants.

"While $200 [per each of the three defendants] is not a particularly high penalty, the case sets the third precedent establishing this behavior is abusive. This serves a a strong warning to others who might consider following this path, and later judges may well issue sanctions substantially higher."